Business services cover many varied sectors. They range from technical services such as engineering, architecture and IT, to other professional services such as legal services, employment services and facility management. As one of the largest service sectors, business services contribute to 11% of EU GDP.
Business services are particularly important to European competitiveness as they are essential to manufacturing and other service sectors. They are also increasingly being used to enhance the value of products through new combinations of goods and services and play a central role in the 'servitisation' of the European economy.
There is significant untapped growth potential for business services in the EU today. While they currently face relatively low average productivity and persisting legal barriers, EU Internal Market legislation and policy actions aim at removing these obstacles and stimulating competitiveness in the sector.
There are two EU Directives that support the business services sector in particular:
The European Commission recently conducted a study that identifies the formalities and the related costs imposed on certain businesses providing cross-border services. The study found that businesses engaging in cross-border service provision were confronted with significant administrative barriers and high costs in several EU countries.
To analyse the untapped potential of this important sector and provide a new impetus to policy development, the European Commission set up a High Level Group on Business Services. This initiative was announced in two flagship communications: An Integrated Industrial Policy for the Globalisation Era and A Single Market Act I.